Ruling Raises Standard for Employer Liability in Third-Party Harassment Cases

Thompson Hine reports that the US Court of Appeals for the Sixth Circuit has raised the threshold for proving employer liability in harassment claims involving customers or other third parties.

In Bivens v. Zep, Inc. (Aug. 8, 2025), the court departed from the prevailing negligence-based approach and adopted a more stringent requirement of intentional conduct.

The decision deepens an existing circuit split and marks a significant shift in how Title VII liability is assessed in the Sixth Circuit.

The case involved a sales representative who alleged she was propositioned by a motel manager during a sales call.

After reporting the incident, her employer reassigned her and later included her in a layoff. She claimed her employer failed to address harassment and retaliated against her.

The district court entered summary judgment in favor of the employer, which the Sixth Circuit affirmed. The court concluded that because customers are not agents of the employer, traditional negligence-based vicarious liability principles do not apply. 

Instead, liability exists only where the employer intentionally created or tolerated a hostile environment, requiring proof that harassment was either desired or substantially sure to result.

This reasoning rejected the EEOC’s guidance and the approach of six other circuits, which allow negligence-based liability for failing to act on known third-party harassment.

The Sixth Circuit, citing Loper Bright Enterprises v. Raimondo, emphasized that Title VII targets intentional discrimination, not negligence.

The ruling narrows exposure to liability stemming from client or customer behavior for employers in Kentucky, Michigan, Ohio, and Tennessee.

Legal teams should note that proactive policies, effective training, and prompt responses to complaints nevertheless remain essential to mitigate risk and foster compliance under other Title VII provisions.